RECENT DEVELOPMENT OF MICRO, SMALL AND MEDIUM ENTERPRISES IN INDONESIA

Author: Tulus T. H. Tambunan

ABSTRACT

This paper examines the development of micro, small and medium enterprises (MSMEs) in Indonesia. It aims to answer the following research questions. First, how important are MSMEs? Second, what are their main constraints? Third, how was the impact of the COVID-19 pandemic on them? This study adopted descriptive analysis using secondary data. It shows that MSMEs are dominated by micro and small enterprises (MSEs), and accounted for almost 100% of all firms but only contributed an average per year of around 58 % of the GDP. Their main constraints are a lack of capital, and difficulties in marketing and in the procurement of raw materials. During the pandemic, many MSEs were severely affected although it varied by industry. This study has, however, one limitation. Although the study aims to examine MSMEs, the focus is however on MSEs in the manufacturing industry due to a lack of national data.

Keywords: MSMEs, MSEs, COVID-19, Manufacturing Industry, Constraints.

JEL codes: D22, I25, I26, I60

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Availability of data and materials

The (secondary/national) datasets used by this study are available from the following three sources.

1) Ministry of Cooperative and Small Medium Enterprise (online data):

http://www.depkop.go.id/berita-informasi/data-informasi/data-umkm/.

2) BPS (https://www.bps.go.id):

BPS (2018). ProfilIndustriMikro dan Kecil 2017 (Profile of Micro and Small Industry 2017). Jakarta: Badan Pusat Statistik.

ISSN. 1907-9451

No. Publikasi/Publication Number : 05320.1904

No. Catalog : 6104006

https://www.bps.go.id/publication/2019/11/14/355910d12477675c587b918b/profil-industri-mikro-dan-kecil-2018.html

BPS (2020). ProfilIndustriMikro dan Kecil 2020 (Profile of Micro and Small Industry 2020). Jakarta: Badan Pusat Statistik.

ISSN. 2745-6773

No. Catalog : 6104006

No. Publication: 05300.2202

https://www.bps.go.id/publication/2022/03/04/a6375ea4a72374e3bedd0b00/profil-industri-mikro-dan-kecil-2020.html

BPS  (2021).  IndustriMikro dan Kecil di Masa Pandemi COVID-19, 2020 (Micro and Small Industries dueing the COVID-19 Pandemic). Jakarta: Badan Pusat Statistik.